CENTRAL COMMUNITY HOSPITAL D/B/A MERCYONE ELKADER MEDICAL CENTER

2021-001 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #420818642 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Medical Center is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Medical Center was unable to provide documentation to support review and approval of the Medical Center?s claimed expenses spreadsheet and lost revenue calculation by an individual other than the preparer. In addition, the revenue used to calculate lost revenue within the Medical Center?s special report submitted to the Department of Health and Human Services for Period 1 Tin #420818642 did not agree to the final revenue reported within the audited financial statements for the year ended June 30, 2020. The Medical Center was unable to provide documentation to support review and approval of the Medical Center?s special report submitted to the Department of Health and Human Services for Period 1 TIN #420818642 by a separate individual outside of the preparer. Cause: The Medical Center had not implemented a documented review process for the claimed expenses spreadsheet, lost revenue calculation or special report for Period 1. The Medical Center had also not implemented an internal control to verify that all audit entries were included in the lost revenue calculation. Effect: Without a secondary review and approval, there is a possibility that the lost revenue calculation and expenses claimed under the program may not be calculated or reported properly. Questioned Costs: None reported. The revenues used to calculate lost revenue did not agree to the final revenue reported within the audited financial statements; however, if all audit adjustments were properly included, the lost revenue calculation would have increased by $1,750. Context: Nonstatistical sampling was used with a sample size of 60 of 728 expenditures. The lost revenue calculation for all applicable quarters was tested and reviewed. Key line items were tested on the Period 1 Department of Health and Human Services special report. Repeat Finding from Prior Years: No Recommendation: We recommend the Medical Center implement a control process which includes a secondary review and approval of the expenses claimed, lost revenue calculation, and special report. We also recommend the Medical Center implement a control process which verifies that all audit entries were included in the lost revenue calculation. Views of Responsible Officials: Management agrees with the finding.